During this pandemic, many have been reviewing their will and estate planning, leading to discussions among family members and with professional advisers. The meaning of the expression “knowledge is power” becomes particularly clear when applied to the legal implications of estate planning. Making informed decisions and putting our testamentary documents in order gives us the peace of mind of knowing that our loved ones will be suitably cared for.
To have or not to have a will
You should know that if someone fails to plan their estate, the law of the province where they resided determines the heirs and sets out the rules for distribution of the estate among them; if the person was married and had descendants, the remainder of estate is divided among the spouse and descendants according to the proportions predetermined by the law of their province of residence. Each province has its own predetermined rules of distribution. This is why you must find out about this.
To avoid legal consequences, you’re better off having a will. The many advantages of a will and estate planning are clear. They include the following:
- Designating your heirs.
- Deciding on the proportion of your remainder of estate that each of your heirs will be entitled to (equal or variable shares).
- Having the option, if your children are minors or young adults, of creating a testamentary trust so that they do not receive their inheritance when they are too young.
- Making charitable donations to a non-profit organization of your choice.
- Naming the executor of your will.
- Deciding who will be the guardian of your minor children (if the other parent is also deceased).
- Being able to minimize the tax implications of your passing.
- Simplifying the administration of your estate.
It is interesting to note that a gift from your estate allows you to leave a legacy that will perpetuate your donation to a cause that you hold dear. This is only possible if you have a will and a plan for your estate that enables you to better fulfill your desire to fight inequality and create a fairer world. Consider your estate gift as an investment for posterity.
There are some situations that may require particular estate planning, for example, if you’re part of a blended family, if you have a descendant or an heir in care, if you hold property in a foreign jurisdiction (a condo in the U.S., for example) or if you’re in a common law relationship. In fact, in some provinces, being a common law partner does not meet the legal definition of “spouse,” so a common law partner might be excluded from being an heir to the estate.
Don’t forget about power of attorney
Estate planning also reminds us of the importance of having a power of attorney in the event that you’re unable to make decisions. There are two types of power of attorney: (1) one regarding personal care, which enables someone to make decisions about your health care and (2) one regarding possessions, which enables someone to make decisions about your financial affairs. The person whom you designate acts in your name and must make decisions in your interest.
It’s true that estate planning is hardly a cheerful topic. However, it’s a necessary step to help your loved ones get through this stage without unnecessary hassles. To avoid having the law determine your heirs and the distribution of your remainder of estate, make a will.